August 28, 2025

Heads up, India! The Trump administration’s sharp 50% tariffs on Indian goods just kicked in on August 27, stirring a storm in trade and industry circles. But wait, there's more sizzling news: India may soften rules on Chinese investments as ties with China warm up again. A senior official revealed, "If need be, we can take a relook at Press Note 3," suggesting India might ease some restrictions on Chinese FDI to boost cooperation after months of improved dialogue and ministerial visits. This thaw also sets the stage for Prime Minister Narendra Modi’s trip to China for the Shanghai Cooperation Organisation Summit, where he's set to meet President Xi Jinping — the first such encounter in seven years. Meanwhile, US President Donald Trump has imposed a heavy 50% tariff on Indian goods. The move targets India's purchase of Russian oil and affects Indian exports valued at over $48 billion. This has sparked mixed reactions within India. “Trump’s tariffs may at first seem a blow to India’s housing sector, but affordable housing remains upbeat thanks to government subsidies, cheaper building materials, and rising jobs,” said Atul Monga, CEO of BASIC Home Loan. Yet, the tariffs have hit textiles, gems, jewellery, leather, and other labour-heavy industries hard. The Federation of Indian Export Organisations (FIEO) reported production halts in places like Tirupur and Surat as orders dry up. Political voices are outspoken too. Former minister MJ Akbar criticized Trump's tariffs as "an exercise in power" that weakens America itself. The Finance Ministry warned of long-term risks, while Tata Steel’s CEO Narendran assured that Indian steel may be safe but European operations could feel the heat. The US side feels differently. Kevin Hassett, US National Economic Council Director, linked tariffs partly to pressuring Russia and slammed India's "intransigence" on market access. Yet, US Treasury Secretary Scott Bessent stayed hopeful: "At the end of the day, we will come together." India is fighting back smartly — it launched a 40-country textile export outreach to the UK, Japan, Germany, and more, aiming to become a reliable supplier of sustainable and innovative products. Meanwhile, the Commerce Ministry is working with exporters to explore new markets and strategies. India-US trade talks face tough red lines, especially on farming and small business protections. A bilateral trade agreement remains stalled, with the US postponing scheduled visits. Modi’s commitment to protecting farmers and fishermen was firm: he will “stand like a wall.” Domestic industries brace for impact but stay resilient amid uncertainties. Harsha Vardhan Agarwal of Ficci praised India’s strong consumer base and reforms. Meanwhile, global trade patterns shift, with major Asian exporters rushing shipments to the US before tariffs hit hard. The ongoing tariff saga is also shaking financial markets, with stock indexes falling and export-linked sectors suffering. Yet, experts caution against panic, citing strong domestic demand and government support. Not all is gloom: Surat’s diamond hub believes the effect on their industry will be short-lived. And despite global headwinds, India’s aim to double trade with the US by 2030 remains alive. So, dear readers, India’s trade story is a thrilling rollercoaster! As Trump’s tariffs roar loud, India tweaks its global ties, explores fresh markets, and keeps its hope high to outsmart the trade tempests.

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Tags: Us tariffs, India exports, Donald trump, Trade relations, China fdi, India-us trade,